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Tax professionals have been advised to take note of the change of date in the indexing of fuel tax credit rates, as complications for clients may arise, says one mid-tier.
While fuel tax credit rates are indexed twice a year, on 1 February and 1 August, in line with the consumer price index (CPI), the Australian Bureau of Statistics’ late release of the December 2017 CPI has caused the fuel tax credit rate to be pushed back to 5 February this year.
Pitcher Partners director of customs, fuel tax and international trade, Darryl Daisley, said the date change could lead to administrative issues if they were not accounted for.
“Most of the fuel tax credit claimants over the last couple of years have been used to the change occurring on either 1 August or 1 February and now this year, they would have expected 1 February but it's now 5 February,” said Mr Daisley.
“It's just an administrative thing this year by the looks of it, the ABS data which feeds into the CPI rate, they didn't get warning of greater than five days which then meant that it must happen on the fifth day after the publication date.
“It just shows you that claimants have to watch very closely for the rates and the dates of the change because it is the first time it's been not 1 February for many years, and because the way the Fuel Tax Act works, it all ties into date of acquisition of the fuel, as to what rate is then applied to against that fuel.”
Mr Daisley also said businesses, including small business owners, needed to understand the complexity of the fuel scheme to ensure they were claiming their full entitlement.
“The federal fuel scheme covers tens of thousands of businesses, from small councils mowing verge lawns and reserves all the way up to the BHPs of the world,” said Mr Daisley.
“Where we're seeing clients coming unstuck is not getting the right rate for that particular fuel, not identifying and correctly allocating the right portion to either an off-road or on-road environment and then you have to look at when you bought that fuel.
“The way the scheme is structured is that the small- to medium-sized to large guys, the tax office's expectation is that they would like everyone to claim monthly because it goes onto the BAS, and there is a healthy portion of clients who don't get in their claims monthly and may take a number of months before they work their claim in.
“So it's just an added complexity of getting the right dates, the rates, the type of fuel, you may need to apportion, and some of the fuel may be ineligible for a fuel tax credit depending on your mix of your fleet and the type of vehicles that you use.”